Not for Publication in West's Federal Reporter
United States Court of Appeals
For the First Circuit
No. 11-1148
CALIXTO COLÓN-RIVERA; JUAN SÁNCHEZ; JORGE PLARD;
ADALBERTO AVILÉS; NOEMÍ VALENTÍN
Plaintiffs, Appellants,
v.
ASOCIACIÓN DE SUSCRIPCIÓN CONJUNTA DEL SEGURO DE
RESPONSABILIDAD OBLIGATORIO,
Defendant, Appellee,
ATTORNEY GENERAL OF THE COMMONWEALTH OF PUERTO RICO,
Intervenor.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Jaime Pieras, Jr., Senior U.S. District Judge]
Before
Lynch, Chief Judge,
Torruella and Thompson, Circuit Judges.
A.J. Amadeo Murga for appellants.
Carlos Lugo-Fiol, with whom Luis R. Román-Negrón, Acting
Solicitor General, Irene S. Soroeta-Kodesh, Solicitor General,
Leticia Casalduc-Rabell, Deputy Solicitor General, and Zaira Z.
Girón-Anadón, Deputy Solicitor General, were on brief, for
Intervenor Attorney General of Puerto Rico.
Verónica Ferraiuoli-Hornedo, with whom Nigaglioni and
Ferraiuoli was on brief, for appellee.
December 13, 2011
LYNCH, Chief Judge. A group of privately-insured motor
vehicle owners have sued the Asociación de Suscripción Conjunta del
Seguro de Responsabilidad Obligatorio ("JUA") under 42 U.S.C.
§ 1983, seeking as relief only damages for alleged violations of
their constitutional rights under the Takings and Due Process
Clauses. In light of this court's decision in García-Rubiera v.
Fortuño, No. 10-2507, 2011 WL 6004615 (1st Cir. Dec. 2, 2011), in
which plaintiffs raised similar claims against officials of the
Commonwealth of Puerto Rico, we direct entry of judgment for
defendant.
The underlying facts are described in our decision in
García-Rubiera, 2011 WL 6004615. We summarize those facts here.
In 1995, Puerto Rico passed Law 253, which requires all
motor vehicles traveling on public roads to obtain compulsory
liability insurance. P.R. Laws Ann. tit. 26, § 8051 et seq.
Pursuant to Law 253, the owners of such vehicles are required to:
(1) either pay premiums (of $99 for private or $148 for commercial
vehicles) to the Commonwealth at the time they acquire, and each
subsequent year when they renew, their vehicle registration, id.
§ 8053(a), or (2) opt-out of the Commonwealth's insurance plan by
purchasing private insurance with comparable or better liability
coverage, id. § 8061(a).
Law 253 also created JUA to administer the Commonwealth's
insurance plan. Id. § 8055. JUA is composed of and operated by
-3-
Puerto Rico's largest private insurance companies, and exists to
insure vehicle owners who participate in the Commonwealth's
insurance plan. Id. § 8055(a), (b). It has responsibility for
insuring Puerto Rico's "high-risk" drivers, who cannot obtain
insurance through private insurers, but who are nonetheless
required to obtain compulsory insurance under Law 253. Id.
§ 8055(b).
JUA's funding comes from the compulsory premiums paid to
the Commonwealth by vehicle owners every year when they renew their
vehicle registrations. The Commonwealth periodically remits these
premium payments to JUA, which then distributes the funds among its
member companies. Id. § 8055(c), (e), amended by Act 201 of Dec.
29, 2009, art. 4.
The Commonwealth's insurance option provides only minimal
coverage to vehicle owners; thus, many drivers obtain private
liability insurance for more complete coverage. Id. § 8052(j),
amended by Act 201 of Dec. 29, 2009, art. 2. Under Law 253,
drivers who obtain a specified amount of private insurance are not
required to pay for state insurance on top of their private
insurance and may opt out of the state insurance program. Id.
§ 8061. Although Puerto Rico's Insurance Commissioner has enacted
various procedures over the years designed to help these
privately-insured vehicle owners opt out of the state insurance
program, these procedures have been under-utilized, and a
-4-
substantial percentage of privately-insured vehicle owners
("insureds") have been required to pay for both state and private
insurance.
When an insured is required to pay for state insurance on
top of his or her private insurance, he or she is entitled to full
reimbursement of the state purchase price. However, for a variety
of reasons described more fully in García-Rubiera, 2011 WL 6004615,
many insureds -- in some years, a majority of insureds -- are not
reimbursed for their duplicate premiums. As a consequence, their
duplicate payments remain, initially, in the custody of JUA.
At the heart of plaintiffs' claims is Puerto Rico's Law
230. In 2002, Puerto Rico enacted Law 230, which directs JUA to
transfer all the accumulated unreimbursed premium payments -- as of
December 31, 2001, a sum of approximately $73 million -- to Puerto
Rico's Secretary of the Treasury, and, thereafter, to repeat this
transfer of funds every two years. Act No. 230 of Sept. 11, 2002,
§ 2 (codified at P.R. Laws Ann. tit. 26, § 8055(l)); see also id.
Statement of Motives ("[D]uring the existence of [JUA], certain
funds have been accumulated to it that do not belong to it. . . .
[I]t is of greater benefit to the public interest in general to
immediately transfer those funds to the . . . custody of the
Department of the Treasury."). Law 230 also requires the Secretary
of the Treasury to hold the transferred premiums "as trustee" for
five years, and to establish a claims process for refunding the
-5-
premiums to insureds. P.R. Laws Ann. tit. 26, § 8055(l). After
five years any remaining unreimbursed funds escheat to the
Commonwealth. Id. Although the Secretary of the Treasury
established a procedure for reimbursement, relatively few insureds
have successfully utilized this procedure, perhaps because, as we
held in García-Rubiera, 2011 WL 6004615, the Secretary failed to
give adequate notice of these procedures.1
Plaintiffs filed their complaint in this case on
September 20, 2007, seeking legal and punitive damages under 42
U.S.C. § 1983, alleging that JUA violated their constitutional
rights under the Takings and Due Process Clauses through conduct
tantamount to state action. Plaintiffs argue that by transferring
the duplicate premium funds to the Secretary of the Treasury as
required by Law 230 (alleged to be unconstitutional), JUA committed
a taking and violated plaintiffs' substantive and procedural due
process rights. Plaintiffs additionally argue that JUA violated
its duty under Puerto Rico law to distribute the funds directly to
individual insureds.2
1
As of 2010, the Secretary of the Treasury had reimbursed
a total of $9 million worth of duplicate premiums, a small fraction
of the total sum of premium payments it has received from JUA,
which, as of the last accounting in 2009, totaled $157 million.
The Secretary has used the difference to supplement the
Commonwealth's general budget.
2
The convoluted history of this case is set forth below.
In response to plaintiffs' complaint, JUA filed a motion to
dismiss, which the district court initially granted, finding that
plaintiffs' action (1) was not ripe under the Supreme Court's
-6-
What is at issue here is the district court's grant of
defendant's motion for summary judgment as to all of plaintiffs'
federal law claims, its denial of plaintiffs' motion for summary
judgment, and its dismissal of plaintiffs' Puerto Rico law claims
without prejudice. Colón-Rivera v. Asociación de Suscripción
Conjunta del Seguro de Responsabilidad Obligatorio, No. 07-1875,
2010 WL 5376116 (D.P.R. Dec. 27, 2010). The district court held
that although plaintiffs had demonstrated a property interest in
their duplicate payments, plaintiffs did not suffer any deprivation
of that interest as a result of Law 230 and its companion
regulations. Therefore, the court concluded, JUA's actions
pursuant to those laws could not violate plaintiffs' constitutional
rights under the Takings or Due Process Clauses. The court did not
reach the question of whether JUA's actions constituted state
action for purposes of plaintiffs' constitutional claims.
decision in Williamson County Regional Planning Commission v.
Hamilton Bank of Johnson City, 473 U.S. 172, 194-95 (1985), and (2)
was time barred under Puerto Rico's statute of limitations for tort
actions. Colón-Rivera v. Asociación de Suscripción Conjunta del
Seguro de Responsabilidad Obligatorio, 594 F. Supp. 2d 169 (D.P.R.
2008).
On a motion for reconsideration, the district court found
that there was an intervening change in the law with this court's
earlier decision in García-Rubiera v. Calderón, 570 F.3d 443 (1st
Cir. 2009), as well as an error of fact regarding the time bar.
Colón-Rivera v. Asociación de Suscripción Conjunta del Seguro de
Responsabilidad Obligatorio, 665 F. Supp. 2d 88, 91-92 (D.P.R.
2009). The district court accordingly vacated its earlier order
and held that plaintiffs' takings claim was ripe, id. at 93, and
that plaintiffs' claims were not time barred, id. at 93-95.
-7-
In García-Rubiera, 2011 WL 6004615, we held that insureds
"have a sufficient property interest in the duplicate premiums,"
id. at *6 (citing García-Rubiera v. Calderón, 570 F.3d 443, 455
(1st Cir. 2009)), that Law 230 and its companion regulations effect
a deprivation of insureds' property for purposes of procedural due
process, id. at *7, and that the Commonwealth had violated the
minimum notice requirements of the Due Process Clause, id. at *13.
We remanded to the district court for entry of a declaratory
judgment and injunctive relief as to plaintiffs' notice claim. Id.
at *16. In addition, we rejected plaintiffs' takings and
substantive due process claims against the Commonwealth, as well as
plaintiffs' claim that Procedure 96 was so burdensome as to violate
their rights under procedural due process. Id.
We may affirm the district court's grant of summary
judgment on any grounds apparent from the record. New Fed Mortg.
Corp. v. Nat'l Union Fire Ins. Co. of Pittsburgh, PA, 543 F.3d 7,
11 (1st Cir. 2008). Plaintiffs raise substantially the same claims
against JUA as were raised against the Commonwealth in
García-Rubiera. We reject plaintiffs' takings, substantive due
process, and burdensomeness claims for the same reasons we rejected
those claims in that case. See García-Rubiera, 2011 WL 6004615, at
*14-15 (holding that plaintiffs failed to articulate proper takings
claim and that substantive due process and burdensomeness claims
failed on the merits).
-8-
To the extent plaintiffs make a procedural due process
notice argument against JUA (and it is not clear that they do), the
injunctive relief ordered by this court in García-Rubiera, 2011 WL
6004615, will address future problems. However, here, plaintiffs
seek damages, not injunctive relief. Plaintiffs are not entitled
to the damages relief they have requested for a number of reasons.
Plaintiffs argue that "Law 230 compels JUA to transfer
the duplicate payments" to the Commonwealth, and that the transfers
thus "are fairly attributable to the state." (Emphasis added).
Plaintiffs' constitutional claims -- that the transfer of funds
from JUA to the Commonwealth was a taking, violated procedural due
process, and was irrational for substantive due process purposes --
are claims against the Commonwealth. The damages relief plaintiffs
seek is for the Commonwealth's alleged constitutional violations in
enacting Law 230; all that JUA did was comply with a state law, as
it was required to do.3
The Eleventh Amendment bars claims against the state or
state officers acting in their official capacities except to the
extent that plaintiffs seek prospective injunctive relief. Edelman
v. Jordan, 415 U.S. 651, 677 (1974). Plaintiffs may not circumvent
this constitutional bar by seeking damages from JUA instead of from
the Commonwealth.
3
There was and could be no allegation that JUA was
conspiring with the Commonwealth since it was merely doing what Law
230 required.
-9-
Accordingly, we affirm entry of judgment for defendant,
albeit on different grounds than those utilized by the district
court, as well as the dismissal without prejudice of the Puerto
Rico law claims.
So ordered.
-10-
Colon-Rivera v. Asociacion De Suscripcion
Combined Opinion